The New York Times has logged more than 100,000 digital subscribers since switching to a metered pay model for content on its website and digital platforms three weeks ago, company executives announced in their first quarter 2011 earnings report.
"We do not yet have visibility into conversion and retention rates for these paying customers, although early indicators are encouraging," said Times CEO Janet Robinson in prepared statements on a conference call with analysts Thursday morning. "We expect to be in a better position to disclose additional details as this initiative evolves."
Some of those 100,000 subscribers signed up as part of a four-week $.99 trial offer. Later in the call, Times digital chief Martin Nisenholtz said: "We are encouraged by the results we're seeing from promo offers converting to full payment."
The Times began charging for online content on March 28 as part of a new, consumer-driven revenue strategy designed to offset declines in print advertising. Readers get 20 free articles a month, and the homepage and section fronts remain browsable for free. Beyond that, full, unlimited digital access now costs between $15 and $35 a month. Times articles remain free if they are accessed via blogs or social media.
"The good news is that fewer people are doing it [reading Times content for free] than we modeled," said Niesenholtz about results from the company's tracking system. "The people who are doing it would likely never pay in any event."
Nisenholtz also said that the impact on traffic is "well within" what the Times expected it might lose in the move to a paid model. One early study found that visits to nytimes.com had declined between 5 and 15 percent.
Meanwhile, Robinson said the Times expects to spend $13 million on the paywall system through the end of the year, "primarily due to promotional costs." It's estimated that the Times invested $25 million in developing the technology.
Home delivery subscriptions, which come with unlimited digital access, have increased since the pay model went into effect, Robinson said.
Despite Thursday's promising numbers about the paywall transition, the Times Company, which owns an array of newspapers and media properties in addition to its flagship, did not have all good news to report. First quarter revenues dropped 3.6 percent, to $566.5 million from $587.9 million during the same period in 2010, while advertising revenues fell 4.4 percent due to a decline on the print side. Company profits, meanwhile, plummeted 57.6 percent, to $5.4 million from $12.8 million a year earlier.